Healthcare Business News

Injunction sought against Calif. Medicaid rate cuts

By Melanie Evans
Posted: November 22, 2011 - 3:15 pm ET

Legal battles over California Medicaid rate cuts continue. The California Hospital Association went to court to ask a federal judge to prevent retroactive Medicaid cuts for hospital-based skilled-nursing services. The trade group on Nov. 1 filed a lawsuit in U.S. District Court in Los Angeles after the CMS approved California's plan to cut Medi-Cal rates for non-acute care. The most recent action seeks a preliminary injunction against rate cuts (PDF) the association said would reach 23% to 28%.

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The latest complaint claims rate cuts submitted by the California Department of Health Care Services and approved by HHS failed to consider provider costs or whether payments were consistent with efficiency, economy and quality of care, as required. The lawsuit also alleges an analysis of how reduced rates would affect access was “fatally flawed.” The lawsuit claims the reduced rates violate the constitution by paying inadequate rates for a mandated service.

“During months of conversations with state and federal officials, hospitals across California provided compelling evidence about the impact these cuts will have on access to care for our most vulnerable patients,” the trade group's president and CEO, C. Duane Dauner, (PDF) said in a news release. “We believe that the cuts are in violation of federal Medicaid law and without regard for the welfare of thousands of patients with complex medical needs.”

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